Friday, September 14, 2012

Top Story

New smartphone, tablet releases likely to push airfreight up

This year's race to provide the latest smartphones and tablets is good news for many shipping companies, as it will likely raise airfreight rates significantly.

Apple, Google, Microsoft and Amazon all have brand new offerings in
mobile technology. It is anticipated that the critical mass of many new products coming out simultaneously could drive a price jump larger than the 20 percent increase caused by Apple's new iPad release in March.

The resulting crunch cause average airfreight rates up to $5 a kilogram in September, according to said Satish Jindel, president of SJ Consulting Group. July's rate was $3.82, and Drewry reports the average rate in March, when the iPad was released, was $4.44.

"We have kind of a perfect storm of new product launches," said Jim Corridore, a Standard & Poor's equity analyst who covers transportation companies. Corridore estimates a rate increase may last through October. "They're all going to want to be expedited."

Companies such as FedEx, UPS and Atlas, the largest operator of Boeing cargo planes, are poised to benefit during a pre-holiday season likely to be negatively affected by slow U.S. job growth. Companies had scaled back capacity earlier this year as demand dropped in Europe and China.

DHL will likely be a primary carrier for Apple, including the iPhone 5, coming out September 21. Apple also has plans to release a smaller, cheaper iPad by the year's end, according to industry insiders.

Google launched its Nexus 7 tablet in July, and Surface, Microsoft's tablet computer, will come out on Oct. 26.

Amazon will also step up its game, releasing four different sets of Kindle readers and tablets this year.

For more of the Bloomberg story:

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